Microenterprise Sustainability in Islamic Microfinance
DOI:
https://doi.org/10.15408/sjie.v15i2.50242Keywords:
Baznas microfinance desa, business continuity, financial performance, intellectual capital, Islamic financial literacy, working capitalAbstract
Research Originality: This study fills a gap in prior research by jointly examining Islamic financial literacy, intellectual capital, and working capital in Baznas Microfinance Desa and by testing financial performance as the mechanism through which these factors sustain microenterprises.
Research Objectives: This study analyzes the determinants of microenterprise sustainability among Baznas Microfinance Desa partners in East Java, Indonesia.
Research Methods: Using a quantitative explanatory design, data were collected from 285 respondents through five-point Likert-scale questionnaires and analyzed with PLS-SEM.
Empirical Results: Islamic financial literacy, intellectual capital, and working capital significantly enhance financial performance and microenterprise sustainability. Working capital shows the strongest contribution, while financial performance has the largest direct effect on sustainability and significantly mediates the relationships between the three determinants and sustainability.
Implications: Islamic microfinance programs should prioritize working-capital management while strengthening Islamic financial literacy and capability-oriented mentoring to build intellectual capital, as these factors improve financial performance and, in turn, sustain microenterprises.
JEL Classification: D14, G21, G32, L25
How to Cite:
Bastomi, M. (2026). Microenterprise Sustainability in Islamic Microfinance. Signifikan: Jurnal Ilmu Ekonomi, 15(2), 615-626. https://doi.org/10.15408/sjie.v15i2.50242.
References
AlQershi, N. A., Saufi, R. B. A., Yaziz, M. F. B. A., Ramayah, T., Muhammad, N. M. N., & Yusoff, M. N. H. Bin. (2023). The Relationship between Green Entrepreneurship, Human Capital and Business Sustainability in Malaysian Large Manufacturing Firms: An Empirical Study. Technological Forecasting and Social Change, 192, 122529. https://doi.org/10.1016/j.techfore.2023.122529.
Arshad, M. Z., Arshad, D., Lamsali, H., Ibrahim Alshuaibi, A. S., Ibrahim Alshuaibi, M. S., Albashar, G., Shakoor, A., & Chuah, L. F. (2023). Strategic Resources Alignment for Sustainability: The Impact of Innovation Capability and Intellectual Capital on SME’s Performance. Moderating Role of External Environment. Journal of Cleaner Production, 417, 137884. https://doi.org/10.1016/j.jclepro.2023.137884.
Azman, N. H. N., Zulkafli, A. H., Masron, T. A., & Majid, A. R. A. (2023). The Interconnectivity between Islamic Financial Literacy and Financial Sustainability : Evidence from Muslim Micro-Entrepreneurs in Malaysia. Journal of Islamic Accounting and Business Research, 16(4), 791–810. https://doi.org/10.1108/JIABR-07-2022-0191.
Banerjee, P., & Deb, S. G. (2023). Capital Investment, Working Capital Management, and Firm Performance: Role of Managerial Ability in US Logistics Industry. Transportation Research Part E: Logistics and Transportation Review, 176, 103224. https://doi.org/10.1016/j.tre.2023.103224.
Barros, V., Falcão, P. F., & Sarmento, J. M. (2022). Are More Sustainable Firms Able to Operate with Lower Working Capital Requirements? Finance Research Letters, 46, 102407. https://doi.org/10.1016/j.frl.2021.102407.
Bastomi, M., & Sudaryanti, D. (2024). The Influence of Islamic Capital Market Literacy toward Intention to Invest in Islamic Capital Market: Does Risk Perception Mediate The Relationship? Journal of Accounting and Investment, 25(1), 1–24. https://doi.org/10.18196/jai.v25i1.19630.
Beltramino, N. S., García-Pérez-de-Lema, D., & Valdez-Juárez, L. E. (2022). The Role of Intellectual Capital on Process and Products Innovation. Empirical Study in SMEs in an Emerging Country. Journal of Intellectual Capital, 23(4), 741–764. https://doi.org/10.1108/JIC-07-2020-0234.
Castro, J. P. G., Ramírez, D. F. D., & Escobar, J. M. (2021). The Relationship Between Intellectual Capital and Financial Performance in Colombian Listed Banking Entities. Asia Pacific Management Review, 26(4), 237–247. https://doi.org/10.1016/j.apmrv.2021.03.002.
Creswell, J. W., & Creswell, J. D. (2018). Research Design: Qualitative, Quantitative, and Mixed Methods Procedures. New Jersey: SAGE Publications Asia-Pacific Pte. Ltd.
Dinc, Y., Çetin, M., Bulut, M., & Jahangir, R. (2021). Islamic Financial Literacy Scale: An Amendment in the Sphere of Contemporary Financial Literacy. ISRA International Journal of Islamic Finance, 13(2), 251–263. https://doi.org/10.1108/IJIF-07-2020-0156.
Ferreira, A., Franco, M., & Haase, H. (2022). Strategic Alliances and Development of Intellectual Capital: A Study of Technology-Based SMEs. International Journal of Organizational Analysis, 30(6), 1644–1671. https://doi.org/10.1108/IJOA-10-2020-2440.
Fornell, C., & Larcker, D. F. (1981). Structural Equation Models with Unobservable Variables and Measurement Error: Algebra and Statistics. Journal of Marketing Research, 18(3), 382. https://doi.org/10.2307/3150980.
Gao, J., Siddik, A. B., Abbas, S. K., Hamayun, M., Masukujjaman, M., & Alam, S. S. (2023). Impact of E-Commerce and Digital Marketing Adoption on the Financial and Sustainability Performance of MSMEs during the COVID-19 Pandemic: An Empirical Study. Sustainability, 15(2), 1594. https://doi.org/10.3390/su15021594.
Gorondutse, A. H., Arshad, D., & Alshuaibi, A. S. (2020). Driving Sustainability in SMEs’ Performance: The Effect of Strategic Flexibility. Journal of Strategy and Management, 14(1), 64–81. https://doi.org/10.1108/JSMA-03-2020-0064.
Habriyanto, Trianto, B., Azman, N. H. N., Busriadi, Muchtar, E. H., & Barus, E. E. (2022). Does The Component of Islamic Financial Literacy Affect on MSMEs Decision in Islamic Banking Financing : Creative Economy Investigate. International Journal of Islamic Business and Economics (IJIBEC), 6(2), 138–147. https://doi.org/10.28918/ijibec.v6i2.6090.
Hair, Jr., J. F., M. Hult, G. T., M. Ringle, C., Sarstedt, & Marko. (2022). A Primer on Partial Least Squares Structural Equation Modeling (PLS-SEM) (3rd Ed). New Jersey: Sage Publishing.
Hong, S. J., Farris, M. T., Pohlen, T. L., & Idug, Y. (2023). Exploring the Impact of Working Capital in the U.S. Aviation Industry for Profitability and Shareholder Value. Transport Policy, 144, 90–101. https://doi.org/10.1016/j.tranpol.2023.10.006.
Jeandry, G., & Fajriyanti, N. (2023). Financial Performance As Mediation is Influenced by Diversification and Intellectual Capital on Sustainability Performance. International Journal of Research in Business and Social Science, 12(3), 345–352. https://doi.org/10.20525/ijrbs.v12i3.2483.
Kurniasari, F., Lestari, E. D., & Tannady, H. (2023). Pursuing Long-Term Business Performance : Investigating the Effects of Financial and Technological Factors on Digital Adoption to Leverage SME Performance and Business Sustainability — Evidence from Indonesian SMEs in the Traditional Market. Sustainability, 15, 12668. https://doi.org/10.3390/su151612668.
Lontchi, C. B., Yang, B., & Shuaib, K. M. (2023). Effect of Financial Technology on SMEs Performance in Cameroon amid COVID-19 Recovery: The Mediating Effect of Financial Literacy. Sustainability, 15(3), 2171. https://doi.org/10.3390/su15032171.
Menne, F., Mardjuni, S., Yusuf, M., Ruslan, M., Arifuddin, A., & Iskandar, I. (2023). Sharia Economy, Islamic Financial Performance and Factors That Influence It — Evidence from Indonesia. Economies, 11(4), 111. https://doi.org/10.3390/economies11040111.
Nugraha, D. P., Gufron, I. A., Pringgondani, P., & Ilhamdi, I. (2022). The Effect of Sharia Financial Literature, Government Support and Sharia Fintech on MSME Sustainability. Enrichment: Journal of Management, 12(2), 1365–1372. https://doi.org/10.35335/enrichment.v12i2.406.
Nurjannah, D., Wardhana, E. T. D. R. W., Handayati, P., Winarno, A., & Jihadi, M. (2023). The Influence of Managerial Capabilities, Financial Literacy, and Risk Mitigation on MSMEs Business Sustainability. Journal of Law and Sustainable Development, 11(4), 1–16. https://doi.org/10.55908/sdgs.v11i4.520.
Osman, I., Syed Alwi, S. F., Rehman, M. A., Muda, R., Hassan, F., Hassan, R., & Abdullah, H. (2024). The Dilemma of Millennial Muslims towards Financial Management: An Islamic Financial Literacy Perspective. Journal of Islamic Marketing, 15(1), 59–78. https://doi.org/10.1108/JIMA-09-2021-0283.
Raharjo, K., Worokinasih, S., & Imamah, N. (2023). The Impact of Financial Literacy on Sustainability of Small Businesses: Government Policy Perspective. In. Barnett, W. A., & Sergi, B. S. (Eds). Macroeconomic Risk and Growth in the Southeast Asian Countries: Insight from Indonesia, 33A, 19–33. https://doi.org/10.1108/S1571-03862023000033A002.
Siddik, A. B., Rahman, M. N., & Yong, L. (2023). Do Fintech Adoption and Financial Literacy Improve Corporate Sustainability Performance? The Mediating Role of Access to Finance. Journal of Cleaner Production, 421, 137658. https://doi.org/10.1016/j.jclepro.2023.137658.
Srisusilawati, P., Malik, Z. A., Silviany, I. Y., & Eprianti, N. (2022). The Roles of Self-Efficacy and Sharia Financial Literacy to SMEs Performance: Business Model as an Intermediate Variable. F1000Research, 10, 1–15. https://doi.org/10.12688/f1000research.76001.2.
Suntraruk, P. (2023). The Mediating Effect of Profitability on the Relationship Between Working Capital Management and Sustainable Growth. Studies in Business and Economics, 18(1), 314–327. https://doi.org/10.2478/sbe-2023-0017.
Tulcanaza-Prieto, A. B., Aguilar-Rodríguez, I. E., & Lee, C. W. (2022). Customer Perception and Its Influence on the Financial Performance in the Ecuadorian Banking Environment. Sustainability, 14(12), 1–14. https://doi.org/10.3390/su14126960.
Vukovic, D. B., Spitsina, L., Spitsin, V., & Gribanova, E. (2023). The Joint Impact of Working Capital and Platform-Economy on Firm Profitability: The Case of E-Business Model in Transition Country. Journal of Open Innovation: Technology, Market, and Complexity, 9(2), 100060. https://doi.org/10.1016/j.joitmc.2023.100060.
Yusfiarto, R., Nugraha, S. S., Mutmainah, L., Berakon, I., Sunarsih, S., & Nurdany, A. (2022). Examining Islamic Capital Market Adoption from a Socio-Psychological Perspective and Islamic Financial Literacy. Journal of Islamic Accounting and Business Research, 14(4), 574–594. https://doi.org/doi.org/10.1108/JIABR-02-2022-0037.
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Mohamad Bastomi
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
